Aston Martin is stuck in idle

FEW ASTON MARTIN owners dare push their sports cars to the edge of losing grip in a fast corner. The same cannot be said of shareholders in Aston Martin Lagonda (AML), which owns the prestige brand. An ill-judged initial public offering in 2018, predicated on rapid growth, has the company careening.

The IPO was an attempt to emulate the success of Ferrari, which floated in 2015. (The chairman of Exor, which has a significant stake in Ferrari, also sits on the board of The Economist’s parent company.) The Italian supercar-maker enjoys 25% operating margins, closer to what LVMH makes on its Louis Vuitton handbags than what Daimler gets for Mercedes cars. Ferrari’s share price has trebled since going public. AML’s, by contrast, has plunged by three-quarters. Its market value now stands at just £1.1bn ($1.4bn). After turning an operating profit in 2017 and 2018, in November it reported a loss for the first nine months of last year. On January 7th the company issued its second profit warning since July.

AML is selling far fewer cars than it hoped—20% fewer relative to early forecasts for 2019, when around 5,800 actually rolled off the production line. The goal of making 14,000 cars a year by 2023 looks fanciful. Attempts to meet it, by investing in new models, have left AML with net debts of around £...



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